"We expect business (advances and deposits) to grow to Rs 90,000 crore by March 2006," K N Prithviraj, chairman, OBC said admitting that achieving Rs 1,00,000 crore (Rs 1000 billion) as earlier projected by the bank headquartered in New Delhi is still a "challenge".
The bank's business grew by 22.6 per cent to Rs 79,403 crore (Rs 794.03 billion) till September this year. Provisions for the losses of GTB unit pulled down the profits of OBC by 23 per cent to Rs 165 crore (Rs 1.65 billion) in the second quarter ended September 30, 2005 from Rs 215 crore (Rs 2.15 billion) in the same period last year.
Prithviraj said the bank made floating provisioning of Rs 43 crore (Rs 430 million) against bad assets, which brought down net NPAs to 0.8 per cent.
OBC had to take Rs 172 crore (Rs 1.72 billion) hit due to depreciation in the value of government securities it was holding, besides the additional outgo due to 13 per cent wage hike. "If we exclude all these provisioning, then our net profit is much higher than it is visible," Prithviraj said.
"Our strategy is to recover most of the NPAs of erstwhile GTB so that we bring down net NPAs to 0.5 per cent by March 2006," he said.
In the first half this fiscal, OBC has recovered Rs 67 crore (Rs 670 million) from the GTB bad loans in addition to Rs 200 crore (Rs 2 billion) recovered last fiscal.
The bank has completed merger of GTB with itself and is now leveraging the new generation bank's retail expertise to increase business.
OBC has opened 13 branches this year and plans to open 8 branches more by March-end.
